Why growth hacking is failing you (and what you should do instead)

The following is an edited excerpt from Lost and Founder: A Painfully Honest Field Guide to the Startup World by Rand Fishkin. The excerpt is provided by Portfolio Publishing. You can buy a copy of the book here.

I deeply empathize with the temptation to chase growth hacks. Startup marketing blog posts and presentations are filled with stories of how one great tactic transformed the growth curve of a nascent business and made them leaders in their field. If you’ve spent any time investigating this realm, you’ve probably heard the same stories.

Airbnb’s hack was to scrape Craigslist’s vacation and rental home listings, then contact all of the owners and convince them to also list their properties on Airbnb (or, according to some accounts, do so without even getting permission). Technically, this violated Craigslist’s ToS (Terms of Service — the publisher’s guidelines for how the website is allowed to be used), but it’s now the stuff of legend among growth hackers of the startup world. They point to this story and argue that you can’t make a growth omelet without breaking some ToS eggs.

Dropbox’s hack was a double-referral system wherein, when a Dropbox user referred someone else to the service, both the referrer and the receiver of the referral got upgraded account benefits. For years, that growth “hack” was featured on marketing event stages and in blog posts across the web. The endless copycatting of this tactic resulted in plenty of frustrations as other businesses failed to capitalize the way Dropbox had.

When Drew Houston, Dropbox’s founder, presented his “Startup Lessons Learned” in 2010, he wisely noted that “marketing tactics for one market type fail horribly in others.” Dropbox itself had tried to replicate the growth hacks of othe “badge” restaurant owners could put on their websites to showcase their positive reviews.

The badge linked back to the Yelp page, sending Yelp both traffic and, through the search engines’ love of links, high search rankings for restaurant names, categories, cities, and more. That strategy had been tried before, by TripAdvisor and Citysearch, but no one nailed the process more effectively than Yelp, and for years, Yelp rode the wave of SEO returns those badges helped enable.

These stories aren’t atypical. PayPal’s US$5 signup referral, Uber’s many city-by-city hacks (the littering of referral cards, the unpaid posters in bar and restaurant bathrooms on Friday nights, the totally evil practice of faking ride pickups to their competitors so as to hurt their profits and response times), Facebook’s college-focused growth tactics (e.g., get the Greek systems on Facebook and everyone else will follow) in the early days, and dozens more are pointed to by startup founders, investors, and pundits as evidence that finding the right, innovative “hack” has replaced classic marketing practices as the way new companies can and should achieve sky-high growth rates.

Like most stories of success, there’s a kernel of truth surrounded by a mountain of hyperbole and oversimplification. Some growth hacks do work. Most don’t. Even at the companies just described, the vast majority of individual growth tactics didn’t take. Sadly, they don’t get the press coverage or focus.

The lesson should be: these companies tried dozens of innovative marketing tactics, combined them with strong, constantly improving products and plenty of traditional marketing best practices, and in some cases, a few specific tactics proved particularly effective as part of this mix.

Instead, the shiny object-chasing narrative is the one that earns headlines and lives on in the subculture of technology startups. But if observing the life cycle and hardships of company formation and growth has taught us anything, it’s to look beyond simple explanations for the deeper, more complicated truth. We should do that here, too.

Growing your startup’s brand, customer reach, conversion rate, retention, engagement, and virality can include finding that one great hack, but to do that, you need a broader understanding of the problem you’re working to solve.

The alternative: Sustainable marketing flywheels

Great companies are almost universally fed by a powerful, ongoing set of marketing processes that earn attention from the right audiences and bring them to the company’s (physical or virtual) doorstep. I like to describe the complexities of the marketing process as a flywheel.

This metaphor refers to a piece of machinery from the industrial revolution that stored up rotational energy from inconsistent sources in the form of inertia. This could then be used to power any number of systems that require a consistent output of that energy.

While flywheels are critical to build, there is overlap between investing in them and experimenting with growth hacks. My experience has been that the best time to leverage a hack is when it perfectly fits with an area where your flywheel is experiencing friction.

When thinking about how to build a marketing process that’s going to work for the long term, that can scale without friction, that can build on itself even as your business grows, consider the flywheel analogy. Each one will be different, and yours should be substantially unique from your competitors, built to take advantage of your particular skills, and targeted to your specific audience.

The “hacks” or marketing tactics you employ should be in service to this funnel, not instead of it. If you’ve got a great idea for a landing page or a referral program or a way to reach the right customers via a social network in a scalable manner, just make sure you know how to test, track, and apply it inside the funnel you’re building. Growth hacks alone can’t solve all your marketing problems, but the right ones may add immense value to an already humming marketing flywheel.

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